House internet transactions bill hurdles 2nd reading

The proposed e-commerce bureau will serve as the “central authority” tasked to regulate online trade and shall act as a virtual one-stop-shop for consumer complaints on internet transactions. (Pexels photo)

MANILA – An electronic commerce (e-commerce) bureau will soon be created to protect consumers and merchants engaged in internet transactions as the bill proposing such hurdled second reading at the House of Representatives.

During Tuesday’s plenary session, the chamber passed via voice vote House Bill 4, or the proposed Internet Transactions Act, which is a priority legislation mentioned by President Ferdinand R. Marcos Jr. in his first State of the Nation Address last July 25.

In his sponsorship speech, Batangas Representative Mario Vittorio Mariño said the bill seeks to regulate all business-to-business and business-to-consumer commercial transactions over the internet, including those related to internet retail, online travel services, digital media providers, ride hailing services and digital financial services.

The proposed e-commerce bureau will serve as the “central authority” tasked to regulate online trade and shall act as a virtual one-stop-shop for consumer complaints on internet transactions.

“No less than our Chief Executive underscored the need to enact a law which aims to establish an effective regulation of commercial activities through the internet or electronic means to ensure that consumer rights and data privacy are protected, innovation is encouraged, fair advertising practices and competition are promoted, online transactions are secured, intellectual property rights are protected and product standards and safety are observed,” Mariño said.

He said the Internet Transactions Act shall apply to any entity, foreign or domestic, who purposefully and voluntarily directs its activities to the Philippine market, which shall be deemed as doing business in the Philippines and hence shall be subject to applicable Philippine laws.

In addition, the proposed law ensures parity and respects competition between online merchants and those who offer their goods and services through brick-and-mortar establishments.

The e-commerce bureau shall take the lead in the development of online dispute resolution platforms which shall be the single-point of entry for consumers and online merchants seeking out-of-court resolution of disputes.

Likewise, the same bureau is mandated to establish, manage and maintain a registry of online businesses which shall provide consumer access to data and information of registered online business entities for purposes of verifying the validity, existence and other relevant information pertaining to business entities.

The Department of Trade and Industry shall lead in the establishment of an industry-led e-commerce trust mark to provide assurance of safety and security in internet transactions.

It prescribes separate penalties for online merchants, e-commerce platforms, ride-hailing service providers, as well as consumers, found in violation of the provisions of the proposed law.

Mariño said online retail and other e-commerce services are a “mainstay” in the lives of Filipinos, citing the latest report by e-Conomy Southeast Asia that the Philippines registered the fastest growth in digital investments in the region with a 63-percent increase from 2021 to 2022.

According to the same report, the country’s digital economy is expected to reach USD20 billion in gross merchandise value by the end of this year after growing 22 percent over the past year.

He said the local digital economy is projected to reach USD35 billion by 2025 growing at a 20-percent compound annual growth rate and possibly will hit USD100 billion to USD150 billion by 2030.

“Despite the partial resumption of in-store shopping, e-commerce accounted for 70 percent of the overall Philippine digital economy. E-commerce, food delivery, and video on demand are the top 3 digital activities of Filipinos showing an adoption rate of 88 percent, 69 percent, and 58 percent, respectively among digital urban users,” he said.

The Philippines is also expected to become a hot investment hub across sectors, including digital financial services, he noted.

“Given the actual and expected growth in e-commerce transactions, government regulations must be securely in place in order to protect the rights and interests of consumers and to provide them with remedies in case of complaints,” he said.

“Likewise, by prescribing guidelines, businesses operating in the digital market, particularly small and medium enterprises, will be able to scale up, and expand their markets, build their reputation, and create verifiable track record of their performance and trustworthiness,” he added.